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Two years ago, the Patents County Court – which deals with claims relating to all kinds of intellectual property – underwent major reforms. These were designed to provide an affordable forum for intellectual property litigation for small and medium-sized enterprises (SMEs). Now this new look court is up and running, how is it performing?

History

The Patents County Court (PCC) was set up in 1990 as a specialist court designed to deal exclusively with intellectual property disputes. It was intended to provide a less costly and less complex alternative to the High Court Patents Court.

For its first ten years, the PCC operated under its own procedural rules, however, for various reasons the court proved unpopular and by 2000 there were very few cases in its list. Over the next decade, the PCC gradually established itself as a useful forum for intellectual property (IP) cases, but the introduction of the Civil Procedure Rules had effectively eroded the differences in procedure between the PCC and the High Court. This meant that even small IP disputes could be complex and expensive, discouraging SMEs from enforcing their rights.

Time for change

Following a long period of consultation in which the views of SMEs were key, major reforms were introduced on October 1, 2010. At the same time, a dynamic new judge, HH Judge Birss QC, took over the reins.
The reforms were aimed at providing a more streamlined, cheaper forum for a wide range of IP disputes. They introduced more active case management by the court, capped the costs that can be recovered and, importantly, limited a party’s exposure to its opponent’s costs.

The reforms included provisions that:

the parties set out their respective cases fully but concisely at the outset;

no further evidence, written argument or specific disclosure is permitted without the permission of the judge and will be decided at an all-important “Case Management Conference”;

any other applications will, if possible, be dealt with on paper or by telephone;

the trial will be limited to one or at most two days;

the total recoverable costs are capped at £50,000 for determining liability; and

damages are limited to £500,000.

On October 1, 2012, the PCC introduced a special “Small Claims Track” for IP claims valued at under £5,000 and which relate to copyright, trade marks, passing off, database right and unregistered design rights. This “no frills” regime should help certain SMEs and individuals who have struggled to justify the cost of enforcement when faced with prolific (often web-based) infringement of their IP rights.

Have the changes been effective?

Two years into its new life, the PCC is running like a well-oiled machine. HH Judge Birss is viewed as delivering clear, well-reasoned judgments and the reforms have been widely regarded as a triumph. The PCC has proved its effectiveness for SMEs, for whom certainty of exposure to costs and a strict timetable can be critical for business certainty. HH Judge Birss made clear in his judgments in Mumford and in Gelex that these considerations have informed how the reforms have been put into practice.

With tight case management from the judge, it has proved possible to fit even a full patent case – with validity and infringement issues and evidence from experts – into a two day trial; for example, BOS v Cobra. It is unlikely this could be achieved in the same timescale in the High Court.

Gordon Harris, Wragge & Co’s head of intellectual property, who acted for Cobra in the BOS v Cobra case, said: “This system limits costs (and important management time), while still achieving the injunction which is key for many claimants.”

While there is a £50,000 overall cap on costs, a separate, smaller costs cap applies for each stage of the proceedings to ensure costs are tightly controlled. BOS v Cobra established that where the successful party has not won on every issue, that party’s costs will be assessed and reduced to reflect the issues on which it was unsuccessful, before the court then applies the costs cap to the different stages.

Importantly, this means a party is not unjustly penalised for losing on certain issues, provided its core case was successful.

There have been no reported cases in the Small Claims Track and it is too soon to assess its effectiveness. It is likely that its real value will be for graphic designers, photographers, artists and other owners who rely on licensing income to use this track as a way of cracking down on web-based infringement.

This week, it was reported that the PCC may now move into the High Court, as the county court system is about to be reformed. Let’s hope it stays on track, providing this important forum for SMEs.

This press article may contain information of general interest about current legal issues, but does not give legal advice.